At long last we are emerging from the blind alleys down which the debate about income inequality seems to have wandered. The first such dead end was marked “fairness.” The top tenth of one percent of earners feel the tax system unfairly expropriates too large a portion of their incomes, bloated though those after-tax incomes are with special tax advantages. Those in the top 1 percent who have not made it to the top 0.1 percent say it is unfair that they should have to charter jets while the 0.1 percent own their jets: Hillary Clinton, a jet-charterer, feels “broke” because jet-owning funders of her campaign are richer. Many members of the 99 percent believe it unfair that they should have to fly economy on vacation jaunts that they could not dreamed of taking a few short years ago. Developing countries believe it unfair that more productive economies claim “a disproportionate” share of the world’s resources. Politicians hope to cope with claimed unfairness by concocting measures of “happiness” to guide them.

The second blind alley is a street strewn with erroneous data, data that interfere with the formulation of intelligent policy. In this alley inequality is measured: